THE GOVERNMENT HAS brought forward plans to incentivise home improvement work with homeowners who are planning to renovate their homes able to claim up to €4,050 in tax relief from tomorrow.
The measure is contained in the Finance Bill 2013, published today, which gives effect to many of the measures announced in the Budget last week by Finance Minister Michael Noonan.
The measure, the Home Renovation Incentive scheme, was due to come into effect from January 2014 for two years. But extensive lobbying and fears that it may see a decline in construction work between now and Christmas has led to its immediate introduction.
Work costing a minimum of €5,000 could qualify for a minimum tax credit of €675 with up to €4,050 in tax relief being available if the work exceeds €30,000 in cost.
The measure will continue to apply in the first three months of 2016 where planning permission has been granted before 31 December 2015.
Homeowners and construction workers will be expected to be tax compliant in order to qualify for the reliefs, the latter an attempt to crackdown on ‘rogue builders’.
Other changes included in the bill will see the pension levy raised to 0.75 per cent (from 0.6 per cent) next year, before it is reduced to 0.15 per cent in 2015.
Measures are also being introduced to tighten “mismatches” that exist between tax treaty partners .
This will mean that companies can no longer be considered ‘stateless’ when it comes to tax residency, which is widely seen a response to the controversy surrounding Apple’s tax status in Ireland.
Measures aimed at boosting entrepreneurship and employment include income tax exemptions of up to €40,000 for the long-term unemployed who start their own business.
The bill also maintains the 9 per cent VAT rate for the tourism and hospitality industry while DIRT tax on savings interest is being increased to 41 per cent.
The bill also confirms the changes already implemented to tax reliefs on medical insurance premiums which will be restricted to €1,000 per adult and the first €500 per child, a measure that has been much-criticised.
Other measures in the bill, that were not announced in the Budget last week, include an exemption from income tax of the annual €100 allowance paid to volunteer members of the garda reserve.
The bill will be debated in the Dáil on Wednesday, 6 November.